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District Court 28 March 2025

R v Chu

[2025] NSWDC 309

Fraud & dishonesty
CRIME SENTENCE COMMONWEALTH OFFENCES 4 COUNTS OF MONEY LAUNDERING “FRONTLINE” WORKER REMUNERATED BY 1% OF EACH TRANSACTION GENUINE REMORSE

Citation: R v Chu [2025] NSWDC 309
Court: District Court of New South Wales
Date: 28 March 2025
Judge: Neilson DCJ

Background

The offender was a "frontline" or "middle-man" participant in a money laundering syndicate that collected cash from customers and converted it into Bitcoin. Between February and September 2022, he met with undercover police operatives (UCOs) at Rhodes, NSW, and physically received cash amounts of $50,000, $100,000, and $50,000 on three separate occasions. Following each handover, the syndicate's online account transferred Bitcoin to nominated addresses, deducting a 6% fee per transaction. The offender was remunerated at 1% of each transaction.

When police executed a search warrant at the offender's apartment on 20 September 2022, they found $330,000 in cash in a hallway cupboard and, in a locked safe, five bank cards and identity documents in the names of other persons. The offender cooperated with police by assisting them to access his electronic devices as required.

The offender was arraigned on six counts. He pleaded guilty to four (counts 1, 3, 5, and 6) but pleaded not guilty to two others. The jury acquitted him on those two remaining counts. A separate New South Wales state offence of possessing identification information was dealt with by way of a Court Attendance Notice under a section 166 certificate.

  • The appropriate aggregate sentence for four Commonwealth money laundering offences under the Criminal Code Act 1995, taking into account the offender's role, subjective circumstances, and relevant sentencing principles.
  • Whether the aggregate sentence should be served by way of an Intensive Corrections Order (ICO) rather than full-time custody.
  • The appropriate penalty for the state offence under s 192K of the Crimes Act 1900 (possessing identification information with intent to deal with proceeds of crime).
  • The application of the Court of Criminal Appeal's decision in Vamadevan v R [2024] NSWCCA 223 to the sentencing exercise.

Decision

Neilson DCJ sentenced the offender on the basis that he was a low-level, "frontline" participant in the syndicate rather than an organiser or controller. The syndicate charged customers 6% per transaction; the offender received only 1%. His role was to physically collect the cash and hand it over, with the actual Bitcoin conversion carried out elsewhere within the syndicate.

The sentencing was deferred from November 2024 to await the Court of Criminal Appeal's decision in Vamadevan v R, delivered on 6 December 2024, which was relevant to the proper approach to sentencing for this category of Commonwealth money laundering offences.

Significant mitigating factors weighed in the offender's favour: genuine remorse, prior good character, cooperation with police (including assisting access to his devices), a low likelihood of reoffending, and a positive response to the period of pre-bail custody he served in September and October 2022. The court noted that the 17 days the offender spent in custody before being bailed appeared to have had a profound deterrent effect on him personally.

On the state offence, the court sentenced the offender to a fixed term of 17 days' imprisonment, reflecting the period he had already served in pre-bail custody between 20 September and 7 October 2022. The ICO imposed for the Commonwealth offences did not account for that period.

Orders Made

  • Count 1 (Commonwealth): Indicative sentence of 6 months' imprisonment.
  • Count 3 (Commonwealth): Indicative sentence of 12 months' imprisonment.
  • Count 5 (Commonwealth): Indicative sentence of 18 months' imprisonment.
  • Count 6 (Commonwealth): Indicative sentence of 3 months' imprisonment.
  • Aggregate sentence of 3 years' imprisonment for counts 1, 3, 5, and 6, to be served by way of an Intensive Corrections Order, commencing 28 March 2025, with conditions including:
  • No further offences
  • Supervision by a Community Corrections officer
  • 500 hours of community service work
  • Participation in rehabilitation or treatment programs as directed
  • Reporting to the Parramatta Community Corrections office within seven days by telephone
  • State offence (s 192K Crimes Act 1900): Fixed term of 17 days' imprisonment, commencing 20 September 2022 and expiring 7 October 2022 (time already served).
  • Orders made by consent in accordance with agreed short minutes of order.

Key Takeaways

  • A low-level, "frontline" role in a money laundering syndicate (receiving 1% remuneration per transaction, with no control over the conversion process) was treated as a significant mitigating factor in determining both the head sentence and the mode of service.
  • Genuine remorse, prior good character, cooperation with police, and a demonstrated low risk of reoffending can, in combination, support the imposition of an ICO rather than full-time imprisonment even for multiple Commonwealth money laundering offences.
  • The District Court applied Vamadevan v R [2024] NSWCCA 223, which had required the sentencing to be adjourned, illustrating how appellate guidance on Commonwealth money laundering sentencing can directly affect first-instance outcomes.
  • Under s 192K of the Crimes Act 1900, where the offence is carried on a section 166 certificate, the maximum penalty is reduced to 2 years' imprisonment, rather than the 7-year maximum that otherwise applies.
  • Pre-sentence custody can be accounted for by imposing a fixed term of imprisonment for a concurrent state offence equal to the period already served, rather than by backdating or adjusting a Commonwealth sentence subject to an ICO.

Legislation and Cases Referenced

Legislation
- Crimes Act 1900 (NSW), ss 192K, 193BA
- Criminal Code Act 1995 (Cth), ss 11.1(1), 400.4(2), 400.5(2), 400.9(1A)

Cases
- Vamadevan v R [2024] NSWCCA 223
- Kim v R; Fang v R [2016] VSCA 238